A place-based approach to understanding firms' voluntary environmental engagement: The role of regional pressures in the case of Korea

Abstract

Environmental management literature has extensively explored why the regulated community, particularly private firms, join voluntary environmental programs (VEPs) in which participants promise to regulate “beyond compliance.” However, the notion of locus has been rarely considered a key determinant of a firm's VEP participation. This study examines how regional pressures encourage firms' VEP participation. Drawing on a dataset of over 1000 industrial facilities related to five government sponsored VEPs in Korea, it investigates how three types of regional pressures—regulators, industrial peers, and community members—affect firms' decision to join VEPs. The major findings are that firms located in the same region as their conglomerate peers, as well as firms located in a place where a large amount of odor pollutant is released, are more likely to participate in VEPs. These results demonstrate the impact of social attributes derived from the geographic location of firms on facilities' VEP engagement.